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Forwarders welcome end to consortia block exemption

[ October 11, 2023   //   ]

Freight industry representatives broadly welcomed the European Commission’s announcement on 9 October that It would not extend the Consortia Block Exemption Regulation (CBER) that has hitherto allowed liner shipping consortia to operate.
It said that it had concluded that the CBER no longer promotes competition in the shipping sector and that it will let it expire on 25 April 2024. Instead,, carriers operating to or from the EU must assess whether their co-operation agreements are compatible with EU antitrust rules provided in the Horizontal Block Exemption Regulation and Specialisation Block Exemption Regulation.
The Commission’s decision follows a call for evidence in August 2022, inviting feedback from stakeholders on the performance of the CBER.
It concluded that “given the small number and profile of consortia falling within the scope of the CBER, the CBER brings limited compliance cost savings to carriers and plays a secondary role in carriers’ decision to cooperate. Furthermore, over the evaluation period, the CBER was no longer enabling smaller carriers to cooperate among each other and offer alternative services in competition with larger carriers.”
The Clecat European forwarders’ group said it welcomed the European Commission’s decision .Freight forwarders “have long resisted the granting of these extraordinary exemptions to shipping lines” and had opposed a renewal of the Block Exemption, especially in its present form, at previous reviews.
Clecat director general Nicolette van der Jagt, said: “We are pleased that the Commission has listened to the voice of the customers, freight forwarders and their shipper clients…CBER in its present form provides excessive scope for unintended co-operations, far beyond those necessary for the operation of vessel sharing agreements.”
Clecat adds that it is particular concerned about the continued availability of the Block Exemption to a liner shipping industry that is rapidly diversifying into other modes and supply chain functions creating market distortions in the overall logistics market, “where container shipping lines are competing against other logistics service providers who are required to comply with general competition rules”.
Nicolette van der Jagt added: “As noted by the European Commission, the expiry of the CBER does not mean that cooperation between shipping lines becomes unlawful under EU antitrust rules. Instead, carriers operating to or from the EU will assess the compatibility of their co-operation agreements with general EU antitrust rules based on the extensive guidance provided in the Horizontal Block Exemption Regulation and Specialisation Block Exemption Regulation.”
While the Commission’s decision does not directly affect the UK, it does have implications for this country, pointed out director general of the British International Freight Association (BIFA), Steve Parker. A separate consultation on the future of the container shipping is being carried out Competition and Markets Authority.
Parker said: “The sensible conclusion to the ongoing container market public consultation being conducted by the UK’s Competition and Markets Authority would be to introduce an ombudsman to arbitrate on complaints as a minimum. Ideally it would follow the EC’s lead and not retain the equivalent of a block exemption regime for the liner shipping industry in the UK, when the current one expires in April 2024.”
He added that when the CMA announced the review in January this year, BIFA had been surprised that it appeared to issue a provisional position which suggested the extension of a potentially modified CBER into UK legislation.
BIFA has said in the past that its members are extremely concerned that container lines’ practices, as well as easements and exemptions provided to them, have been distorting the free market.
Parker added: “BIFA, and its members, are not anti-shipping line. The association wants to ensure that there is a suitable balance between them as carriers, and our members as customers, points made during various meetings with the CMA.
“The EC has taken a sensible decision and the UK government should follow suit to ensure that shipping lines in future will be subject to competition law.”

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